High Voltage: Here’s why those lithium super profits aren’t slowing down any time soon
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Our High Voltage column wraps all the news driving ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, manganese, magnesium, and vanadium.
Lithium is one of the best performing metals of 2022.
Year-to-date Chinese battery-grade lithium carbonate prices have risen by 90% while lithium hydroxide is up by 127%. Prices for spodumene (6% Li2O) have risen by 189% year-to-date, according to Benchmark.
ASX lithium miners are currently raking it in, a trend set to continue for a while yet.
Here’s Benchmark Mineral Intelligence’s latest supply-demand predictions out to 2030, and beyond:
Between now and 2025: Supply will struggle to keep up with demand.
“In the short-term, continued robust electric vehicle demand globally and record-breaking heat and drought in the southwest of China [which is curtailing lithium supply] are the key drivers for the market,” Benchmark says.
Longer-term, there is very little additional lithium production capacity coming online before late 2023 and early 2024, according to Benchmark, and many projects are still being delayed.
“High prices are incentivising accelerated capital spending which will bring forward the timeline for a number of development stage projects, however the speed of these expansions are struggling to keep pace with growing demand,” Andrew Miller, chief operating officer at Benchmark, said.
Market becomes more balanced around 2026.
In the next four years additional supply will push prices to more stable levels, Benchmark says.
But then it blows out again. Massively.
“The supply deficit is expected to worsen from 2030 onwards, as demand grows by another 1 million tonnes LCE in a few years,” Benchmark says.
Just check out that cascading shortfall from 2030. Certainly good news for quality lithium plays, from early-stage explorers through to the producers.
Do you regularly drive long distances? Worried about EV range?
China-based Contemporary Amperex Technoloy Co (CATL), one of world’s largest EV battery manufacturers, says the new mass-produced Qilin batteries can travel over 1,000km between each charge.
That would easily take you from Melbourne to Sydney, Perth to Carnarvon, or Hobart to Launceston and back 2.5 times.
They are also 13% more powerful than Tesla’s own 4680 battery, it says.
“With a record-breaking volume utilization efficiency of 72% and an energy density of up to 255 Wh/kg, it achieves the highest system integration level worldwide so far,” it says.
“Moreover, by adopting the trail-blazing large-surface cell cooling technology, Qilin supports a hot start in 5 minutes and fast charging in 10 minutes.
“With the same chemical system and the same pack size, it can deliver 13% more power than [Tesla’s] 4680 battery, accomplishing an all-round improvement in range, fast-charging, safety, service life, efficiency and low-temperature performance.”
Geely’s ZEEKR and Sokon Group’s SERES brands will be the first to use Qilin batteries, with rollout pencilled in for early 2023.
— ZEEKR | Official (@OfficialZeekr) August 27, 2022
Here’s how a basket of ASX stocks with exposure to lithium, cobalt, graphite, nickel, rare earths, magnesium, manganese, and vanadium is performing>>>
Battery metals stocks missing from our list? Shoot a mail to [email protected]. Be nice, he’s fragile.
This battery metals/critical minerals explorer is on the ground at the early stage Yinnetharra rare earths and lithium project in WA, where a new batch of “expedited” rock chip samples returned results up to 780ppm rare earths.
That’s positive, the company says, as it works to dial in on the primary source of mineralisation.
More sample results are on their way.
“Our knowledge of Yinnetharra is growing at an exponential rate, with a small batch of positive rock chip results returned for REEs, and with regional success from pairs for thorium anomalies adding to our exploration model, we are starting to grasp the exploration potential from a project area that has had in essence, no exploration,” technical director Ed Mead says.
“With positive REEs responses in assays from strongly altered rocks, on the periphery of thorium responses from recently reprocessed coarse data, our understanding and targeting is improving.”
This lithium play is on a hot streak.
On Monday last week, ASN increased resources at the Paradox lithium brine project in southern Utah by 324% to 788,300t of lithium carbonate equivalent (LCE), paving the way for development.
On Thursday, the share price hit all-time highs after a non-binding deal was inked with global direct lithium extraction (DLE) leader Sunresin to develop a full-scale commercial lithium plant at Paradox.
DLE tech promises to produce cheaper, higher quality, and more environmentally friendly lithium than incumbent processes.
ASN says Sunresin’s DLE technology works — it has already been commercialised at four operating projects. A further six are under construction or under contract in China and South America.
Since November 2021, Sunresin has worked with global engineering firm, Worley, on the Paradox Definitive Feasibility Study (DFS), which will be released soon.
ASN is targeting stage 1 production of 10,000tpa battery grade carbonate.
Stockhead columnist Barry Fitzgerald picked DTM as the ‘most under the radar ASX lithium stock right now’ having recently signed up Chile’s lithium king SQM to a lithium joint venture at its Dorchap project in northeast Victoria.
$US28 billion market cap SQM is one of the big three in the lithium business.
It is best known for its JV with Wesfarmers (ASX:WES) in the $US700m integrated development of the Mt Holland lithium project in WA.